TLDR:
Key Points:
- Venture capitalists made fewer crypto deals in Q2, but the sector saw an increase in funding.
- PitchBook reports $2.7 billion raised across 503 deals in Q2, with a focus on quality investments.
According to a quarterly report by PitchBook, the venture capital sector saw a “flight to quality” in Q2, with investors concentrating capital into a smaller range of opportunities. While the number of deals decreased, the total crypto fundraising rose 2.5% to $2.7 billion. The report highlighted that the biggest deals in Q2 were for layer-1 platform Monad, layer-1 platform Berachain, and bitcoin restaking platform Babylon, indicating a trend towards quality investments.
Robert Le, PitchBook’s senior analyst for emerging technology, noted that the increase in focus on quality investments has been a trend seen over the past year. He suggested that the blockchain networks are likely to undergo a period of consolidation in the future, leading to three to five blockchains hosting most of the developer and user activity. Le also highlighted the potential of the decentralized physical infrastructure sector (DePIN) as one of the standout areas of this cycle, appealing to non-native crypto users.
The report forecasts that 2024’s overall fundraising could be up 20% or more compared to last year, with an expected total of $12-$14 billion for the year. Le emphasized that projects in the space will need to differentiate themselves to remain viable in the long-term, as not all of the current 150 layer 1s and layer 2s operating can be sustainable.
